Metals One secures 30% of Lions Bay Resources and a slice of a US$39.6 million South African plant
Metals One has converted its US$1.8 million convertible loan notes into a 30% equity stake in Lions Bay Resources PTY Ltd (LBR). LBR has acquired a cogeneration plant in the Karbochem Industrial Park, Newcastle, South Africa, independently inspected in October 2025 and given a replacement value of US$39.6 million.
The plant has three potential revenue streams – power generation, steam production and gold roasting – with an estimated US$4.5 million required to restart power and steam, subject to a competent person’s report. For Metals One shareholders, this is a meaningful step into South African gold infrastructure with clear operating optionality.
What Metals One now owns: exposure to a multi-revenue cogeneration plant
Cogeneration plants produce both electricity and useful heat (steam) from the same fuel source, typically offering higher efficiency and lower operating costs. LBR has settled the outstanding US$1.36 million balance to acquire the plant, which has been verified by TerraVista Solutions P. Ltd and ascribed a replacement value of US$39.6 million.
On top of electricity and steam, the plant can be used for gold roasting – the thermal processing of refractory ore to make downstream recovery more efficient. It is expected that around US$4.5 million will be needed to restart power and steam, subject to the receipt of a competent person’s report.
| Key numbers | Detail |
|---|---|
| Equity stake | 30% of Lions Bay Resources |
| Investment converted | US$1.8 million (convertible loan notes) |
| Plant replacement value | US$39.6 million |
| Restart estimate (power & steam) | ~US$4.5 million (subject to competent person’s report) |
| Acquisition balance settled | US$1.36 million |
| LBR incorporation | May 2025 |
Ownership, leadership and shareholder protections at LBR
LBR’s ownership post-conversion is split three ways: 30% Metals One (and secured lender), 35% Lions Bay Capital Inc. (TSX-V: LBI), and 35% the Salamander Mining management team. Metals One also holds 19.1% of Lions Bay Capital Inc., giving it additional look-through exposure to LBR’s progress.
Salamander is led by Graham Briggs (Non-Executive Chairman), the former CEO of Harmony Gold, and Lloyd Birrell (CEO), the founder and former CEO of Theta Gold. Metals One has entered into a shareholders’ agreement covering governance rights, including the ability to appoint a director to LBR’s board, pre-emption rights (first refusal on new share issues) and a list of matters requiring unanimous shareholder consent. These are sensible protections that help preserve influence and limit dilution risk.
The company also notes it is a senior secured lender to LBR, which typically means its security ranks ahead of unsecured creditors. That matters if additional funding is raised at the LBR level.
Strategy: building a vertically integrated South African gold business
LBR’s plan is to combine the plant with producing and processing assets to create a vertically integrated gold business in South Africa. The next step is to advance the proposed acquisition of the Vantage Goldfields assets in the Barberton region. These assets carry a historical resource inventory of 4.5 million ounces of gold, alongside a central metallurgical complex and extensive underground development.
Important caveat: the 4.5 million ounces are a historical estimate based on a 2015 Competent Persons’ Report prepared under the SAMREC and SAMVAL Codes. A qualified person has not done sufficient work to classify the estimate as current mineral resources, and it is not being treated as current. There is no demonstrated economic viability at this stage.
Metals One flags a “BRP creditors meeting” next week, and a positive outcome would unlock discussions for the remaining cash needed to complete the Vantage acquisition and fund mine start-up capital. Timing for these steps is not disclosed.
Why this RNS matters for Metals One shareholders
Positives: strategic asset, modest entry price, clear optionality
- Compelling cost-to-asset ratio: for US$1.8 million, Metals One now owns 30% of an entity holding a plant with a US$39.6 million replacement value, plus the potential to restart for around US$4.5 million (subject to a competent person’s report).
- Multiple revenue avenues: electricity, steam and gold roasting offer diversified cash flow options, which can support broader gold operations.
- Governance in place: board representation, pre-emption rights and unanimous-consent matters help protect shareholder interests.
- Experienced operating team: Salamander’s leadership includes former executives of major South African gold operations.
- Additional exposure via LBI: Metals One also owns 19.1% of Lions Bay Capital Inc., which itself owns 35% of LBR.
- Aligned with stated strategy: Metals One is pursuing critical and precious metals investments amid record high gold prices, with shares listed on AIM (MET1) and OTCQB (MTOPF).
Watch-outs: funding, studies and execution
- Funding still required: the estimated US$4.5 million to restart the plant is subject to a competent person’s report, and additional capital will be needed to complete the Vantage acquisition and mine start-up. Sources and terms of funding are not disclosed.
- Study dependencies: restart assumptions depend on forthcoming technical work. Until that lands, timelines and costs may shift.
- Asset acquisition uncertainty: the outcome of the BRP creditors meeting is a key gating item. It is not guaranteed.
- Limited financial disclosure: LBR was established in May 2025 and has not reported financial information to date.
How I read the risk-reward today
On the face of it, Metals One has bought into real industrial infrastructure on attractive terms, with a shot at integrating upstream gold assets. The plant’s three revenue streams offer useful flexibility, whether LBR pivots first to power and steam or moves quickly to gold roasting once feed is secured.
The counterbalance is straightforward: more technical work and more funding lie ahead before cash flows arrive. The Vantage transaction path runs through creditor approvals and financing discussions, and restart costs are still subject to a competent person’s report. Execution will do the talking from here.
Key milestones and what to watch next
- Competent person’s report for the plant – to firm up the ~US$4.5 million restart estimate.
- Outcome of the BRP creditors meeting – a positive result would unlock funding talks for the Vantage acquisition and start-up capital.
- Funding plan at LBR – structure, cost and any security or dilution implications.
- Board appointments at LBR – Metals One has the right to appoint a director.
- Any operating timeline for power/steam restart – not disclosed yet.
- First financial disclosures from LBR – not disclosed to date.
Bottom line
This is a substantial strategic foothold in South African gold infrastructure for a relatively modest outlay. If LBR can nail down the technical work, secure funding on sensible terms and progress the Vantage assets, Metals One’s 30% stake – alongside its lender position – could prove a well-timed move. For now, it is a credible platform with clear catalysts, but investors should keep an eye on the studies, the creditors meeting and the financing plan.
